The concept of fair use in copyright law is well known to intellectual property practitioners. An analogous concept exists in trademark law, where the use of another's mark is deemed "fair".
United States Intellectual Property
The concept of fair use in copyright law is well known to intellectual property practitioners. An analogous concept exists in trademark law, where the use of another's mark is deemed "fair". As in copyright law, the public benefit of allowing the use is perceived to override any alleged detriment to the trademark owner, and is thus deemed to be a fair use.
The Lanham Act contains a statutory fair use provision, § 33(b)(4), 15 U.S.C. § 1115(b)(4). However, because of the narrow scope of the statutory provision, three additional, judge-made categories have arisen in which use of another's trademark may be considered non-infringing. These are: (1) nominative fair use; (2) comparative advertising as fair use; and (3) parody as fair use. This paper focuses on statutory fair use and the related nominative fair use defense.
I. Statutory Fair Use:
Pursuant to § 33(b)(4) of the Lanham Act, a defense to a claim of trademark infringement exists where:
the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark . . . or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin. . . .
15 U.S.C. § 1115(b)(4) (emphasis added). 1
While this fair use defense is specified as one of the limited number of defenses available to a defendant against a claim of infringement of an incontestable registration, it is also regularly used as a defense against any trademark infringement claim, including a non-incontestable registrations and a § 43(a) infringement claim. The elements of the statutory fair use defense have also been applied to alleged common law infringements.
In general terms, the statutory fair use defense prevents a trademark owner from monopolizing or appropriating a descriptive word or phrase. In a leading case on this defense, Zatarains, Inc. v. Oak Grove Smokehouse, Inc. , 698 F.2d 786 (5th Cir. 1983), the court noted that "[t]he defense is available only in actions involving descriptive terms and only when the term is used in its descriptive sense rather than its trademark sense." 698 F.2d at 791 (citing Soweco, Inc. v. Shell Oil Co. , 617 F.2d 1178, 1185 (5th Cir. 1980).
Generally, if a term was coined by the trademark owner and thus exists only as a trademark, with no independent descriptive meaning, it cannot be used "fairly" under the statutory test. Horphag Research Ltd. v. Pellegrini , 337 F.3d 1036 (9th Cir. 2003) (Defendant using "Pycnogenol" in metatags was not eligible for classic fair use defense since word at issue had no meaning other than as plaintiff’s trademark). Likewise, the statutory defense is only available if the term is used by the defendant descriptively. Brother Records, Inc. v. Jardine , 318 F.3d 900 (9th Cir. 2003) (statutory fair use did not protect defendant because he was not using BEACH BOYS in dictionary sense of "boys who frequent a stretch of sand beside the sea" but rather, he was referring to secondary meaning of term, i.e. the musical group that recorded Good Vibrations). 2
The purpose of the statutory fair use defense is to allow third parties to accurately describe their goods. 3 Because the use is "otherwise than as a mark," the "fair use" of someone else's trademark in this manner should not be likely to cause confusion. But we know now that the fair use defense remains available even in the face of some likelihood of confusion.
[A]nyone is free to use the term in its primary, descriptive sense so long as such use does not lead to customer confusion as to the source of the goods or services.
In Zatarains , the plaintiff had a federal trademark registration for the mark FISH-FRI for a corn flour product used to batter fish for frying purposes. The district court found that while the mark was descriptive, it had acquired the necessary secondary meaning. However, the defendant's use of "Fish Fry" was deemed a fair use of the term under the statute.
In affirming, the Fifth Circuit highlighted the defendant's good faith, in that it had not used the term in a trademark sense, and had never attempted to register the words as a trademark. Of particular importance to the court was that defendant had consciously packaged their goods in such a way that any potential confusion was minimized. It noted that the "[t]he dissimilarity of trade dress of these products prompted the district court to observe that confusion at the point of purchase -- the grocery shelves -- would be virtually impossible." 698 F.2d at 796.
A. Statutory Fair Use: A True Defense?
Until recently, there was a split between those Courts of Appeals that held that a likelihood of confusion bars the statutory fair use defense and those which held that it did not. On December 8, 2004, the U.S. Supreme Court held that a finding of likelihood of confusion is not necessarily a bar to the statutory fair use defense 4 and that the burden is on the plaintiff to prove a likelihood of confusion and not on a defendant pleading the fair use defense to negate such likelihood confusion. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. , 543 U.S. 111 (2004).
Both parties sold permanent makeup that was injected under the skin. Plaintiff owned an incontestable federal trademark registration for the mark "MICRO COLORS" in white letters separated by a green bar all contained within a black box. Defendant used the term "microcolor" on advertising material and pigment bottles. Plaintiff sued, alleging that defendant was infringing its Micro Colors trademark. The district court granted defendant's motion for summary judgment on the statutory fair use affirmative defense. The court based its holding on the findings that (i) plaintiff had conceded that defendant had used "microcolor" only to describe its goods and not as a mark, and (ii) defendant had acted fairly and in good faith. In reaching its decision, the district court did not examine whether defendant's use of "microcolor" was likely to cause confusion.
The Ninth Circuit reversed, finding that the district court had erred in considering the fair use defense without also considering whether consumers would be confused by defendant's use of "microcolor" for the same goods as plaintiff used its MICRO-COLORS mark. The Ninth Circuit took the position that the use of a term could not possibly be fair if there is a likelihood of consumer confusion arising from such use.
The Supreme Court granted defendant's petition for certiorari to address the split among the circuits as reflected in the following decisions cited by the Court: KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. , 328 F.3d at 1072 (9th Cir. 2003) (likelihood of confusion bars the fair use defense); PACCAR Inc. v. TeleScan Technologies, L.L.C. , 319 F.3d 243, 256 (6th Cir. 2003) ("[A] finding of a likelihood of confusion forecloses a fair use defense"); and Zatarains, Inc. v. Oak Grove Smokehouse , 698 F.2d 786, 796 (5th Cir. 1983) (alleged infringers were free to use words contained in a trademark "in their ordinary, descriptive sense, so long as such use [did] not tend to confuse customers as to the source of the goods"), versus Cosmetically Sealed Industries, Inc. v. Chesebrough-Pond's USA Co. , 125 F.3d 28, 30-31 (2nd Cir. 1997) (the fair use defense may succeed even if there is likelihood of confusion); Shakespeare Co. v. Silstar Corp. of Am. , 110 F.3d 234, 243 (4th Cir. 1997) ("[A] determination of likely confusion [does not] preclud[e] considering the fairness of use"); Sunmark, Inc. v. Ocean Spray Cranberries, Inc. , 64 F.3d 1055, 1059 (7th Cir. 1995) (finding that likelihood of confusion did not preclude the fair use defense). See KP Permanent Make-Up, Inc. , 543 U.S. at 116-117.
In vacating the Ninth Circuit judgment, the Court first examined the language of the Lanham Act provision that creates a statutory cause of action for infringement of registered trademarks, 15 U.S.C. § 1114. That section requires the plaintiff to show that defendant's actions are likely to confuse consumers as to the source or origin of the goods or services at issue. The Court then examined the statutory fair use defense language of 15 U.S.C. § 1115(b)(4). It recognized that the Lanham Act places on plaintiff the burden of establishing a likelihood of confusion as a critical element of its prima facie case. The fair use language on the other hand, makes no mention of likelihood of confusion. The Court concluded that, as a drafting matter, it was not the intent of Congress to place on the defendant the burden of negating confusion when pleading the fair use defense.
Moreover, the Court recognized that, as a practical matter, even absent the statutory defense, a defendant could prevail if the plaintiff had failed to satisfy its burden proving likelihood of confusion. The Court noted that "it is only when a plaintiff has shown likely confusion by a preponderance of the evidence that a defendant could have any need of an affirmative defense." 5 Thus, to be of any use at all, the statutory fair use defense would have to be available despite a finding of a likelihood of confusion.
That, however, does not mean that likelihood of confusion is irrelevant in determining whether a particular use is a fair use. The Supreme Court left the door open to such consideration by saying that its holding does not preclude a court from considering the extent of any likelihood of confusion in assessing whether a defendant's use was objectively fair. Therefore, a defendant arguing that its use is a fair use may still have to show that any likelihood of confusion is not significant.
On remand, the Ninth Circuit Court of Appeals accepted Supreme Court’s invitation and held that "the degree of customer confusion remains a factor in evaluating fair use." KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. , 408 F.3d 596, 609 (2005). Since likelihood of confusion will apparently continue to be a factor in measuring fair use, and since "determining whether a likelihood of confusion exists at the summary judgment stage is generally disfavored," id . at 608, the value of the statutory fair use defense as a tool for early disposal of trademark claims may be limited. 6 The Ninth Circuit made this clear when it held that summary judgment on the fair use defense was improper and specifically listed the degree of likely confusion among the genuine issues of material fact. Id . at 609.
B. Is Prominent Use Fair?
Since the Zatarains court based its decision, in part, on the manner in which the defendant used Fish Fry on its packaging, it should come as no surprise that claims of fair use often turn on whether a defendant uses a mark too prominently on its product or in its advertising. In sharp contrast to the successful invocation of the statutory fair use defense in Zatarains is Sands, Taylor & Wood Co. v. Quaker Oats Co. , 978 F.2d 947 (7th Cir. 1992). In Sands, the owner of several incontestable registrations for the mark THIRST-AID for a variety of beverage products and syrups, sued Quaker Oats for its use of the phrase "Gatorade is Thirst Aid for That Deep Down Body Thirst" in advertising and promotion. 7
The Seventh Circuit agreed with Quaker Oats that "thirst aid" was descriptive for the purposes of §33(b)(4). 8
While Quaker Oats’s use of the term "thirst aid" was descriptive, it did not pass the remainder of the statutory test. Defendant argued that "Thirst Aid"was not used as a trademark because it was always used in conjunction with the famous GATORADE mark. The court rejected this argument. Rather, the court found that Quaker Oats used THIRST-AID as an "attention-getting symbol," which often appeared more prominently and in larger type than the obvious trademark GATORADE. 9 The Sands court cited Louis Rich, Inc. v. Horace W. Longacre, Inc. , 423 F. Supp. 1327 (E.D. Pa. 1976), for the proposition that "use meant to foster identification with defendant and its product is not a fair use." 978 F.2d at 954. 10
However, prominent use does not always preclude fair use. Fair use was found in Wonder Labs, Inc. v. Proctor & Gamble Co. , 728 F. Supp. 1058 (S.D.N.Y. 1990), involving the term DENTIST’S CHOICE for toothbrushes. There, the court held that even though the term was prominently displayed in the defendant's advertisements, simply drawing attention to the phrase was not enough -- attention had to be drawn to the words as a source of the product .
Of course, some cases are more difficult to explain. In Packman v. Chicago Tribune Company , 267 F.3d. 628 (7th Cir. 2001), the Chicago Tribune placed its THE JOY OF SIX headline, referring to the sixth basketball championship won by the Chicago Bulls, prominently on merchandise related to its news coverage of the team, despite plaintiff’s federally registered trademark for THE JOY OF SIX. The Court found the classic fair use defense despite the prominence of use and even though the mark, as used by defendant, was not descriptive of defendant’s goods, but rather of a newsworthy event. Perhaps it was because plaintiff was using the term in question in connection with its newspaper that the court did not take issue with the prominence of the term and that the use in connection with merchandise was not descriptive. 11
In some cases, the key issue is not the prominence of defendant’s use of plaintiff’s mark, but rather the form of its use. Fair use is less likely to be a successful defense if the defendant is not using the term in Standard English form. In Brookfield Communications, Inc. v. West Coast Entertainment Corp. , 174 F.3d 1036 (9th Cir. 1999) Brookfield sued West Coast for its use of its trademark MOVIEBUFF in West Coast’s metatags. Although the court recognized that "movie buff" is a descriptive term, it held that defendant’s elimination of the space between the words "movie" and "buff" was "pivotal" and enjoined defendant’s use of "MovieBuff" while noting it was free to use "Movie Buff." The court further observed that West Coast was free to use MovieBuff on its website if such use of the latter amounted to comparative or nominative fair use, i.e. , "Why pay for MovieBuff when you can get the same thing here for FREE?" 12
Whether because of prominence, format, or more accurately, context, the manufacturer of hockey sticks in Hillerich & Bradsby Co. v. Christian Brothers, Inc. , 943 F. Supp. 1136 (D. Minn. 1996) suffered for placing hockey star Mark Messier’s name alone on the blade of its hockey sticks. The plaintiff, also a hockey stick company, held the exclusive license to use Messier’s name on hockey sticks. The court granted a preliminary injunction and, in doing so, rejected defendant’s fair use defense whereby it claimed that it should be permitted to inform the public that the blade design featured on its hockey stick was the same shape as that used by Messier. The court held that while the defendant was free to advertise the similarity between its hockey stick and the stick used by Messier, it was not free to simply print the name "Messier" on its product.
In addition to prominence, format and context, some courts have rejected the statutory fair use defense because the defendant simply used the term too many times. RainForest Café, Inc. v. Amazon, Inc. , 86 F. Supp. 2d 886 (D. Minn. 1999) (alleged infringer’s prominent use of "Amazon" seven times on its restaurant menus raised genuine issue of fact as to whether term was employed to attract customers’ attention); but see, Playboy Enterprises, Inc. v. Terri Welles, Inc. , 78 F. Supp. 2d 1066 (S.D. Cal. 1999) (applying both nominative and statutory fair use tests, court held that defendant’s repeated use of plaintiff’s marks on defendant’s website was fair even to the extent her use constituted a "repetitous commercial theme.")
C. Can Trade Dress Be The Subject Of Fair Use?
In 1995 the Second Circuit held that the statutory fair use defense can be successfully invoked by a defendant accused of trade dress infringement, specifically, infringement of product configuration trade dress. Car Freshener Corp. v. S.C. Johnson & Son, Inc. , 70 F.3d 267 (2d Cir. 1995). S.C. Johnson marketed a pine-tree-shaped air freshener called "Holiday Pine Potpourri." The plaintiff sued, claiming Johnson’s product infringed its trade dress in pine-tree shaped air fresheners which are typically hung from the rear view mirrors of cars. The court held Johnson’s use to be statutory fair use since it was descriptive of characteristics of defendant’s goods, i.e., a pine scent and a Christmas theme. 13
II. Nominative Use As Fair Use:
Unlike most statutory fair use cases, nominative fair use involves the descriptive use of the plaintiff’s mark to describe or identify the plaintiff's goods or services . While decided as a statutory and/or common law fair use case, WCVB-TV v. Boston Athletic Ass’n. , 926 F.2d 42 (1st Cir. 1991), is more logically a nominative fair use case, although decided before the Ninth articulated the defense and coined the term. This case involved the use of the registered trademark BOSTON MARATHON by a television station in connection with its coverage of the running event. WCVB-TV had displayed the words "Boston Marathon" on the screen before, during, and after their coverage of the actual marathon. The First Circuit found that the fair use defense was properly asserted, reasoning that the trademark was used primarily in a descriptive manner. Because of the "timing, meaning, context, intent, and surrounding circumstances," there was no likelihood of confusion. The court concluded that without allowing others to use the term "Boston Marathon," it would be virtually impossible to describe the Boston Marathon. 14
[T]he words "Boston Marathon" . . . do more than call attention to Channel 5's program; they also describe the event that Channel 5 will broadcast. Common sense suggests (consistent with the record here) that a viewer who sees those words flash upon the screen will believe simply that Channel 5 will show, or is showing, or has shown, the marathon, not that Channel 5 has some special approval from the [trademark holder] to do so. In technical trademark jargon, the use of words for descriptive purposes is called a "fair use," and the law usually permits it even if the words themselves also constitute a trademark.
In 1992, the Court of Appeals for the Ninth Circuit gave a name to this type of fair use defense to trademark infringement. New Kids on the Block v. News America Publishing, Inc. , 971 F.2d 302 (9th Cir. 1992). The Ninth Circuit, in a typically articulate opinion by Judge Kozinski, described those circumstances in which the use of another's trademark is allowed, even when not directly covered by the statutory fair use defense of the Lanham Act:
[W]here the defendant uses a trademark to describe the plaintiff's product, rather than its own, we hold that a commercial user is entitled to a nominative fair use defense provided he meets the following three requirements: First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the use must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.
New Kids involved a balancing of the plaintiffs' rights in the name of their pop group, and the rights of the defendants to use that name to identify the group as the subjects of public opinion polls. The defendants, two newspapers, separately ran polls on their readers’ favorite "New Kid" or which "New Kid" they thought was sexiest, with voting done via a "900" phone numbers. The newspapers advertised these polls using a picture of the "New Kids on the Block," and THE NEW KIDS ON THE BLOCK trademark.
The New Kids on the Block filed suit and alleged trademark infringement by the newspapers for using the New Kids trademark in association with the advertisements for the polls. The district court had granted summary judgment to defendants on First Amendment grounds. On appeal, however, the Ninth Circuit found it unnecessary to reach the constitutional issue, but articulated (and named) the nominative fair use defense.
Much as the statutory fair use defense of the Lanham Act is aimed at protecting a competitor's ability to simply describe its own product, the nominative fair use defense allows a third party fairly to describe another's product without resorting to "absurd turns of phrase to avoid use of the mark." Id . at 306-307. 15 As Judge Kozinski notes, if a law suit resulted every time someone's trademark was referred to, then a valuable social and commercial means of communication would be lost.
Such nominative use of a mark -- where the only word reasonably available to describe a particular thing is pressed into service -- lies outside the strictures of trademark law: Because it does not implicate the source-identification function that is the purpose of trademark, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the trademark holder .
Id . at 308 (emphasis added).
The New Kids opinion states that the "classic fair use case where the defendant has used the plaintiff's mark to describe the defendant's own product" was not applicable. Id . However, it noted that courts had often found fair use in just such situations, citing WCVB-TV (Boston Marathon), discussed above; Volkswagenwerk Aktiengesellschaft v. Church , 411 F.2d 350 (9th Cir. 1969) (automobile repair shop could use VOLKSWAGEN mark to communicate the kind of cars it repairs, so long as it did not suggest authorization or sponsorship); and Universal City Studios, Inc. v. Ideal Publishing Corp. , 195 U.S.P.Q. 761 (S.D.N.Y. 1977) (magazine could use television program's trademark HARDY BOYS in association with a photograph of the show's stars).
Cases like these are best understood as involving a non-trademark use of a mark -- a use to which the infringement laws simply do not apply, just as videotaping television shows for private home use does not implicate the copyright holder's exclusive right to reproduction.
As the Ninth Circuit concluded, rather than being a truly new defense, "nominative use" is really a consolidation of the rationale of these previous cases, which dealt with use of a plaintiff’s mark to describe the plaintiff.
The Ninth Circuit revisited its nominative fair use defense in the context of the use of a personal name, Abdul-Jabbar v. General Motors Corp. , 85 F.3d 407 (9th Cir. 1996). GMC had produced a television commercial which asked the question:
Who holds the record for being voted the most outstanding player of [the NCAA] tournament? Lew Alcindor, UCLA, '67, '68, '69.
The commercial continued by stating that the Oldsmobile Eighty-Eight won an "award" three years in a row, and like the star, the car is a "champ" and a "first round pick".
The defendant had met the first two prongs of the nominative use test: that Lew Alcindor could not be referenced without using his name; and that GMC used the name only to the extent necessary to identify him. The Ninth Circuit reversed the district court's grant of summary judgment, however, on the third prong of the test. Because celebrity endorsements have become an established means of doing business, a jury could reasonably find that the use of Lew Alcindor's name in the commercial implied endorsement. Id . at 413.
The vast majority of nominative fair use cases have been in the Ninth Circuit. Elsewhere, the nominative fair use defense has been used sparingly, but has gained acceptance in recent years in other Circuits. 16 Since it was first enunciated, the requirements for successfully invoking this defense have also been fleshed-out.
We now know that, just as the defendant who seeks the protection of the statutory fair use defense will enjoy greater success if it does not use the mark too prominently, restraint in use of the mark in issue favors the nominative fair use defendant as well. 17 We also know that disclaimers can help a defendant pleading nominative fair use, 18 those who don’t disclaim or clarify may lose 19 and that some re-sellers of a mark owner’s goods have successfully invoked the nominative fair use defense. 20
It remains unclear however, whether the nominative fair use defense is a substitute for a multi-pronged likelihood of confusion test, 21 or whether the New Kids three-part test actually incorporates the traditional likelihood of confusion test. 22
The Third Circuit recently issued an opinion in which it created a two-step approach to the nominative fair use analysis whereby the plaintiff must first establish that confusion is likely through the application of an abbreviated likelihood of confusion test, and then the defendant would have the opportunity to establish nominative fair use based on a variation on the New Kids three-part test. Century 21 Real Estate Corp. v. LendingTree, Inc. , 425 F.3d 211 (3rd Cir. 2005). 23 The majority held that nominative fair use cases call for a likelihood of confusion test that excludes those prongs which would invariably favor plaintiff in the nominative use context. 24 For example, the court noted that consideration of the degree of similarity between the parties’ marks is not helpful since it would "automatically lead to the conclusion that the use is likely to confuse simply because the mark is not merely similar, it is identical." Id . at 225. Likewise, the court noted that consideration of the strength of plaintiff’s mark would lead to an inappropriate conclusion since purported nominative fair users "feel they need to use the actual mark to describe the plaintiff’s product because of its very strength and what it has come to represent." Id . The court advised that other prongs of the likelihood of confusion test could be ignored if the facts before the court rendered those elements irrelevant or inappropriate in light of the specific nominative use at issue.
Under the Third Circuit test, if a likelihood of confusion were found under its abbreviated likelihood of confusion test, the court would then apply its modified New Kids test to determine whether, notwithstanding a likelihood of confusion, defendant’s use of plaintiff’s mark is fair and non-actionable. Under the Third Circuit nominative fair use test, the court is to consider: 25
While the Third Circuit’s test appears on its face to be more stringent, in that it asks whether use of plaintiff’s mark is "necessary," the Century 21 court tempered this requirement when it wrote "the court need not find that the use of the mark is indispensable in order to find this factor fulfilled. For, as we have stated before, the Lanham Act does not compel a competitor to resort to second-best communication." Id . at 229 (internal quotation marks omitted).
The greatest difference between the two tests rests in the third prongs of each. While the New Kids test questions whether the defendant did anything beyond mere use of the mark that would suggest sponsorship or endorsement by the plaintiff, the Third Circuit test asks whether the defendant’s conduct and language reflect the true and accurate relationship between plaintiff and defendants’ product or services. Whether the difference in the test would result in a court reaching a different conclusion in a particular case, however, is doubtful.
Some of the nominative fair use cases decided in the past thirteen years have been factually straight forward; that is, the defendant uses plaintiff’s mark to refer to plaintiff and only plaintiff. 26 In other cases, however, the defendant uses plaintiff’s mark to refer not only to plaintiff’s goods or services, but also to describe a characteristic of defendant’s own goods or services. 27
The best known of the "dual reference" nominative fair use cases involved a resumé of sorts, Playboy Enterprises, Inc. v. Terri Welles, Inc. , 78 F. Supp. 2d 1066 (S.D. Cal. 1999), aff’d , 279 F.3d 796 (9th Cir. 2002). 28 In Welles , the owners of various PLAYBOY marks sued Welles, a former PLAYMATE OF THE YEAR claiming her website and meta tags infringed various marks owned by Playboy. The district court held that both statutory and nominative fair use protected: (1) defendant’s use of "Terri Welles – Playmate of the Year 1981" as the website heading and title of the link page; (2) use of "PMOY ’81" – an acronym for "Playmate of the Year" – as a repeating watermark on web pages, 29 (3) use of PLAYBOY and PLAYMATE in meta tags; and (4) defendant’s use of PLAYBOY and PLAYMATE in advertising banners on her web site and the web sites of others. The Ninth Circuit’s ruling extended the nominative fair use defense to a situation where the defendant used plaintiff’s mark not only to refer to plaintiff’s goods, but also to refer to defendant and her credentials. "The court has found … that Ms. Welles’ use of the terms "PLAYBOY PLAYMATE of the Year 1981," "PLAYMATE of the Year 1981," and "PMOY ‘81" … constitute identification of herself : a nominative fair use." 78 F. Supp. 2d at 1096.
The court found this use fair even though defendant’s use of the contested terms amounted to a "repetitious commercial theme." The court explained,
[a]lthough an infringing use can be evidenced by the employment of a challenged term as an ‘attention-getting symbol,’ the emphasis of a descriptive term on a label, packaging, or advertising does not necessarily mean that the term is being used in a trademark sense.
In so holding, the court noted that the lettering of the plaintiff’s name, "Terri Welles," was larger than the lettering of "PLAYBOY PLAYMATE OF THE YEAR 1981"on the homepage and advertising banners.
In another, unrelated, Playboy case, the court found that the defendant was using "playboy" in its dictionary sense, yet claimed to be applying the nominative fair use test. Playboy Enterprises, Inc. v. Netscape Communications Corp. , 55 F. Supp. 2d 1070 (C.D. Cal. 1999). In this case, Playboy sued to enjoin Netscape from using plaintiff’s marks in connection with their search engines and internet banner advertisements. Netscape sells search terms (including third-party trademarks) to advertisers so that the advertisers could target their most promising audiences. Specifically, Netscape had programmed its search engine so certain ads would appear in response to plaintiff’s PLAYBOY and PLAYMATE marks. The court found that Netscape’s use of PLAYBOY and PLAYMATE was protected fair use, using the nominative fair use test. However, the court also found that Netscape was using the words ‘playboy’ and ‘playmate’ as "words in the English language and not as trademarks to identify a product or service," id . at 1086, which would be a classic, statutory fair use.
III. Statutory Or Nominative Fair Use, Does It Matter?
Some courts have held that "[i]f the defendant’s use of the plaintiff’s trademark refers to something other than the plaintiff’s product, the traditional fair use inquiry governs." Toho Co., Ltd. v. William Morrow and Co., Inc. , 33 F. Supp. 2d 1206 (C.D. Cal. 1998). Following this rule, the court in Trans Union LLC v. Credit Research, Inc. , 142 F. Supp. 2d 1029 (N.D. Ill. 2001) held that where the defendant’s credit reports incorporated information gathered from plaintiff’s database of credit information and defendant used plaintiff’s TRANS UNION mark in metatags, the defendant’s activity was protected by statutory fair use. The lesson of Trans Union seems to be that even if defendant uses a term to refer to plaintiff’s goods or services, if that term also, or ultimately, refers to defendant’s goods or services, the statutory fair use defense could be used. Under the Toho and Trans Union analysis, it may not matter whether the term in question is used in its dictionary sense for its descriptive qualities or its trademark, source-identifying qualities. What seems to matter is to whom or what the defendant is referring when employing the term.
On the other hand, the court in Cairns v. Franklin Mint Company , 292 F.3d 1139 (9th Cir. 2002), explained the distinction between classic and nominative fair use by considering the nominative fair use analysis appropriate when a "defendant has used the plaintiff’s mark to describe the plaintiff’s product, even if the defendant’s ultimate goal was to describe his own product. Conversely, the classic fair use analysis applies "where the defendant has used the plaintiff’s mark only to describe his own product, and not at all to describe the plaintiff’s product." Id . at 1152; see also, Brother Records, Inc. v. Jardine , 318 F.3d 900 (9th Cir. 2003). 30
In Brother Records , the defendant was a former member of the Beach Boys musical group and was sued for his use of the BEACH BOYS trademark. Ultimately, the court abandoned the clear-line test that it and the Cairns court had articulated and recognized that where a defendant uses his or her own title, PLAYMATE OF THE YEAR or member of the BEACH BOYS, the distinction between a use that refers to the defendant and a use that refers to the trademark holder can be more confusing than helpful. Accordingly, the court analyzed the case under both tests and held that the nominative fair use defense did not save defendant. Although defendant Al Jardine satisfied the first two prongs of the New Kids test, he failed to satisfy the third prong because he emphasized BEACH BOYS when promoting his concerts and in so doing, created actual confusion.
IV. Will The Logic Of Permanent Make-Up Apply To Nominative Fair Use Cases?
There are some situations in which the distinction between nominative and classic fair use may make a difference. For example, the dispositive question in nominative fair use case is often whether the term used was the only term reasonably available, while under the statutory fair use defense, the defendant needs simply establish that the term was used descriptively and not as a mark, even if there were other, equally succinct, descriptive terms available.
Another important difference between the two defenses is that the statutory fair use defense may be unavailable to a defendant using a coined term, while a defendant invoking the nominative fair use defense encounters no such hurdle. Note, however, that while a plaintiff’s trademark may technically be a "coined term," sometimes its constituent parts are descriptive, which may allow use of the statutory defense. (FISH-FRI is arguably a coined term, but "fish fry" is descriptive).
Lastly, Permanent Make-up made the statutory fair use defense available even when there is some likelihood of confusion. In contrast, at least one nominative fair use case, decided before Permanent Make-up , held that the multi-pronged likelihood of confusion test was to be incorporated into the third prong of the New Kids test, implying that if likelihood of confusion were found, the defense would be unavailable. 31
The interesting question is whether circuit courts, and particularly those which had previously rejected the statutory defense if there was a likelihood of confusion, will follow the logic of Permanent Make-up when considering nominative fair use. So far, two courts have considered this question and both extended the Supreme Court’s Permanent Make-Up decision to the nominative fair use defense. In Century 21 Real Estate Corp. v. LendingTree, Inc. , 425 F.3d 211, 222-223 (3d Cir. 2005) the Third Circuit wrote "[a]fter [the Permanent Make-Up ] decision, it seems to us that neither classic or nominative fair use should rise and fall based on a finding of likelihood of confusion." Similarly the court in Ty, Inc. v. Publications Int’l, Ltd. , 2005 U.S. Dist. Lexis 23420 at *19 (N.D. Ill. February 25, 2005) wrote "[w]hile the Supreme Court specifically declined to address the nominative fair use defense, I am persuaded that its logic applies with similar force to defendants pursuing the defense of nominative fair use despite the almost certain likelihood of confusion regarding the source of the mark."
To review the 2004 Trademark Fair Use article, click here .
1. The statutory fair use defense also applies to the use of a defendant's own name.
2. For that type of fact pattern, see discussion of nominative fair use below.
3. Sunmark, Inc. v. Ocean Spray Cranberries, Inc. , 64 F.3d 1055 (7th Cir. 1995) (use of the term "sweet-tart" in advertising and promotion for cranberry juice drinks found to be descriptive of such juices, which are both sweet and tart; ads held to be fair use and not infringing of mark SweeTARTS for candy); Microwave Systems Corp. v. Apple Computer, Inc. , 126 F.Supp.2d 1207 (S.D. Iowa 2000) (notwithstanding plaintiff’s rights in "OS-9","defendant’s use of "MAC OS 9" was "fair use" since "OS" was acronym for "operating system" and defendant’s most recent products in its series were OS 7.6, OS 8, OS 8.1, OS 8.5 and OS. 8.6.)
4. The decision only expressly addressed statutory fair use, however, its reasoning has since been used in the context of a nominative fair use defense. Century 21 Real Estate Corp. v. LendingTree, Inc. , 425 F.3d 211 (3rd Cir. 2005)(use of plaintiff’s marks on defendants real estate broker referral website; court held plaintiff must show likelihood of confusion before burden shifts to a defendant in a nominative fair use situation) See also, Ty, Inc. v. Publications Int’l, Ltd. , 2005 U.S. Dist. LEXIS 23420 (N.D. Ill. February 25, 2005).
5. 543 U.S. at 120. While the Court did not address fair use in the context of claims brought under 43(a) of the Lanham Act for infringement of common law trademarks, this decision provides clear guidance to courts faced with a fair use defense in the 43(a) context.
6. Ty, Inc. v. Publication Int’l, Ltd. , 2005 U.S. Dist. LEXIS 23420 at 27, fn. 10 (N.D. Ill. February 25, 2005) ("[w]hile I firmly believe that the likelihood of confusion and nominative fair use analysis are conceptually distinct, I also believe that the standard for granting summary judgment would likely be the same under both analyses."
7. Id. at 950. The legal department at Quaker Oats had determined that this advertising and promotional use of the term "Thirst Aid" did not raise a trademark issue because it was merely a descriptive use." In addition, a trademark investigation had lead Quaker Oats to erroneously believe that plaintiff was no longer marketing any beverages under the THIRST-AID mark. Id .
8. We would note that the line between descriptive and suggestive marks probably rests in a different place when judging the § 33(b)(4) defense than when attempting to register a mark on the Principal Register. In any event, it appears that courts have applied § 33(b)(4) in such a way that the issue in a statutory fair use case is not whether the plaintiff's mark is descriptive of plaintiff's product, but whether the term is used descriptively in relation to the defendant's product. Car Freshener Corp. v. S.C. Johnson & Son, Inc. , 70 F.3d 267 (2nd Cir. 1995) (fact that plaintiff’s trade dress was not descriptive of its goods since its pine tree-shaped air fresheners came in several scents other than pine, was inconsequential since relevant issue is whether defendant’s use is descriptive, not whether plaintiff’s use is descriptive.); contra , Smith v. Ames Dept. Stores, Inc. , 988 F.Supp.827 (D.N.J. 1997) (defendant’s use of "Big Guys" and "one for the big guys" for clothing departments selling clothing for big men could not be, for purpose of summary judgment, held fair use since court concluded that material issues of fact existed as to whether plaintiff’s mark was descriptive even where it was clear that defendants used phrase descriptively.) This decision is incorrect, however, based on the clear language of the statute.
9. Id . at 954. The association between GATORADE and THIRST AID was also increased because of the rhyming quality of the two terms, which made the slogan more memorable. Id .
10. See also, Vining Industries, Inc. v. M.B. Walton, Inc. , 106 F.Supp.2d 966 (S.D. Ohio 1997) (enjoining defendant’s use of TWIST MOP as product name prominently depicted on front of packaging since such use violated plaintiff’s rights in TWIST ’N MOP mark, but allowing continued use of "twist mop" as part of phrase "the easiest twist mop" as that use was less prominent and more clearly descriptive of defendant’s product and, thus, fair use).
11. But use of the term in a traditional expressive context will not always tilt the scales in defendant’s favor. In Films of Distinction, Inc. v. Allegro Film Productions, Inc. , 12 F. Supp. 2d 1068 (C.D. Cal. 1998) the owner of THE CRIME CHANNEL mark sued, alleging infringement stemming from the use of its mark in a film about a boy who watches a television station called The Crime Channel. The defendant moved to dismiss, arguing statutory fair use. The court ruled in Plaintiff’s favor holding that allegations were sufficient to withstand a motion to dismiss.
12. Grammar saved the defendant in Corbitt Mfg. Co., Inc. v. GSO America, Inc. , 197 F. Supp. 2d 1368 (S.D. Ga. 2002). Defendant’s prominent use of "Non-Floating" to describe characteristic of its wood mulch could be fair use, and thus not an infringement of plaintiff’s NO FLOAT mark, in part because, unlike plaintiff’s mark, "Non-Floating" was grammatically correct.
13. In reaching this conclusion, the court reversed the district court’s ruling that the fair use defense was not available where the mark at issue is not descriptive of plaintiff’s goods. The Circuit court acknowledged that plaintiff’s pine-tree-shaped air fresheners came in variety of colors and scents, and thus were not descriptive of plaintiff’s goods, but found that fact to be irrelevant since the critical question is whether defendant’s use is descriptive
14. After all, one could hardly call it "the 26 point 2 mile race run in Boston once a year."
15. Judge Kozinski stressed the need of persons and business to be able to adequately identify another party’s product:
For example, one might refer to 'the two-time world champions' or 'the professional basketball team from Chicago,' but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls.
Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark. For example, reference to a large automobile manufacturer based in Michigan would not differentiate among the Big Three; reference to a large Japanese manufacturer of home electronics would narrow the field to a dozen or more companies.
Id . at 306-307; See also, Cairns v. Franklin Mint Company , 292 F.3d.1139 (9th Cir. 2002) (defendant need not use "the English princess who died in a car crash in 1997" to refer to Princess Diana); Playboy Enterprises, Inc. v. Terri Welles, Inc. , 78 F. Supp. 2d 1066, 1079 (S.D. Cal. 1999) ("To describe herself as the ‘nude model selected by Mr. Hefner’s magazine as its number-one prototypical woman for the year 1981’ would be impractical as well as ineffectual in identifying Terri Welles to the public.")
16. For example, in a case decided shortly after New Kids, the district court in National Football League Prop. v. Playoff Corp. , 808 F. Supp. 1288, 1293 (N.D. Tex. 1992), which dealt with the use of NFL trademarks appearing on the uniforms of players pictured on trading cards, acknowledged that the statutory fair use defense was unavailable, but declined to adopt the Ninth Circuit's rationale in New Kids , holding that it was up to the Fifth Circuit Court of Appeals to adopt such a rationale. The Fifth Circuit has since recognized the defense. See, e.g., Pebble Beach Co. v. Tour 18 I Ltd. , 155 F.3d 526 (5th Cir. 1998). In the Second Circuit, the New Kids nominative fair use defense has been recognized, but not yet successfully invoked. See The Nasdaq Stock Market, Inc. v. Archipelago Holdings, LLC , 336 F. Supp. 2d 294 (S.D.N.Y. 2004).
17. Toho Co., Ltd. v. William Morrow and Co., Inc. , 33 F. Supp. 2d 1206 (C.D. Cal. 1998). (holding that nominative fair use test can not be satisfied where defendant publisher of book about Godzilla series of films had depicted "GODZILLA" mark on cover of book in "bold orange lettering prominently displayed."); Pebble Beach Co. v. Tour 18 I Ltd. , 155 F.3d 526 (5th Cir. 1998) (citing defendant’s prominent use of plaintiff’s marks on defendant’s menus, signs, scorecards and advertising and promotional material as basis for concluding that nominal fair use defense was not available.)
18. Volkswagenwerk Aktiengesellschaft , 411 F.2d at 352 (permitting repair shop to advertise its ability to repair VOLKSWAGEN vehicles, in part, because it made clear through disclaimers that it was not an official or authorized repair shop); Playboy Enterprises, Inc. v. Terri Welles, Inc. , 78 F. Supp. 2d 1066 (S.D. Cal. 1999) (finding a fair use and noting with approval defendant’s frequent use of disclaimers on her web site.)
19. PACCAR Inc. v. Telescan Technologies, L.L.C. , 319 F.3d 243 (6th Cir. 2003) (distinguishing Telescan’s conduct from conduct of Volkswagen defendant to the extent Telescan had not made it clear to visitors to its website that it was "independent" of Plaintiffs); Brookfield Communications , 174 F.3d at 1065-1066 (in applying statutory fair use test, court contrasted defendant’s failure to include disclaimers on its website with the Playboy defendant’s diligent inclusion of disclaimers on her website); Sunsport, Inc. v. Barclay Leisure Ltd. , 984 F. Supp. 418 (E.D. Va. 1997) (court held that fair use defense was not available because alleged infringer did not use disclaimer and did not use text to distinguish its products from mark owner’s.)
20. Trans Union LLC v. Credit Research, Inc. , 142 F.Supp.2d 1029 (N.D. Ill. 2001) (use of plaintiff’s Trans Union mark in metatags was protected by statutory fair use where defendant’s credit reports incorporated information gathered from plaintiff’s database of credit information pursuant to contract between parties); but see, D 56, Inc. v. Berry’s Inc. , 955 F. Supp. 908 (N.D. Ill. 1997) (while unauthorized sale of plaintiff’s goods did not, alone, support trademark infringement claim, use of plaintiff’s marks in advertising and promotional material could support such claim even where the goods themselves are genuine.)
21. Playboy Enterprises, Inc. v. Terri Welles, Inc. , 78 F. Supp. 2d 1066 (S.D. Cal. 1999) (when faced with nominative fair use defense, it is appropriate to substitute 3-part New Kids test for traditional likelihood of confusion test.)
22. Toho Co., Ltd. v. William Morrow and Co., Inc. , 33 F. Supp. 2d 1206 (C.D. Cal. 1998) (addressing the third prong of nominative fair use test by applying 8-factor Sleekcraft likelihood of confusion test and finding confusion was likely).
23. There is also a vigorous dissent on this issue. 425 F.3d at 232.
24. For an excellent discussion of the relevance of the various prongs of the likelihood of confusion test in the nominative fair use context, see The Scott Fetzer Co. v. House of Vacuums, Inc. ,381 F.3d 477, 485 (5th Cir. 2004).
25. For ease of comparison, and by way of review, the New Kids test requires a defendant to prove: (1) that the product or service in question is one not readily identifiable without use of the trademark; (2) that only so much of the mark or marks is used as is reasonably necessary to identify the product or service; and (3) that the user did nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. New Kids on the Block , 971 F.2d at 308.
26. Wham-O, Inc. v. Paramount Pictures Corp. , 286 F. Supp. 2d 1254 (N.D. Cal. 2003) (holding that toy manufacturer would not likely prevail on merits because defendants’ use of SLIP ‘N SLIDE to refer to manufacturer’s product in the movie amounted to nominative fair use); World Impressions, Inc. v. McDonald’s Corp. , 235 F. Supp. 2d 831 (N.D. Ill. 2002), (use of Disney’s stylized DISNEYLAND mark and castle design mark on map of California tourist attractions went beyond mere "nominative" use and, thus, fair use defense was unavailable.)
27. Cairns v. Franklin Mint Company , 292 F.3d.1139 (9th Cir. 2002) (holding that use of Princess Diana’s name and likeness in connection with figurines depicting her was nominative fair use); see also, ETW Corp. v. Jireh Publishing, Inc. , 99 F.Supp.2d 829 (N.D. Ohio 2000) (fair use found where defendant used registered trademark, TIGER WOODS, in narrative description accompanying prints featuring Woods and other famed golfers), aff’d, ETW Corp v. Joreh Pub. Inc. , 332 F.3d 915 (6th Cir. 2003) (holding that "a celebrity’s name can be used in the title of an artistic work as long as there is some artistic relevance.") While purporting to apply the statutory fair use defense, the court in the ETW Corp . (TIGER WOODS) case cited nominative fair use cases.
28. Although the district court ruled in defendants’ favor under both the nominative and statutory fair use tests, the Ninth Circuit’s affirmance relied only on the nominative fair use test.
29. On appeal, the Ninth Circuit, held that defendant’s repetitive use of PMOY ’81 in the "wallpaper" of website was not a fair use. The court’s finding turned on the first prong of the New Kids nominative fair use test. The court found that the term PMOY ’81 was "not necessary to describe Welles and, in fact, did not even appear to describe Welles, since it did not appear in close proximity of her name or likeness." Playboy Enterprises, Inc. v Terri Welles, Inc. , 279 F.3d 796, 804 (9th Cir. 2002).
30. To illustrate this point, the Brother Records court referred to the Welles case as a case in which the statutory fair use analysis did not apply. Specifically, the court wrote that although Welles arguably also used the mark to describe herself in the first instance – as she herself was indeed Playboy Playmate of the Year in 1981 – the fact that Welles used Playboy’s marks to describe Playboy’s products at all arguably precluded the application of the classic fair use analysis. The district court had relied on both nominative and statutory fair use.
31. Toho Co., Ltd. v. William Morrow and Co., Inc. , 33 F. Supp. 2d 1206 (C.D. Cal. 1998) (addressing the third prong of nominative fair use test by applying 8-factor Sleekcraft likelihood of confusion test and finding confusion was likely).
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